Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
In this auto insurance dispute, a panel of the Colorado Court of Appeals rejected the notion that a vehicle-based restriction on uninsured/underinsured motorist coverage is allowed under Colorado insurance law.
Beverly Hughes was injured in a car accident and tried to recover uninsured/underinsured motorist benefits under a policy from Essentia Insurance Company. Essentia insured Hughes’ two classic cars, but Hughes wasn’t driving them during the accident. Instead, she was driving her regular use vehicle, which she was required to have and separately insure in order to maintain her classic car policy.
Essentia refused to provide Hughes UM/UIM benefits because the classic car policy excepted “regular use vehicles” from coverage. Hughes sued, alleging she was entitled to the benefits under the classic car policy regardless of which car she was driving.
The trial court concluded that Essentia’s exclusion of regular use vehicles is consistent with Colorado insurance law and public policy because the policy states that classic cars won’t be used regularly, lowering the risk of an accident and, consequently, the premiums. The trial court also reasoned that Hughes’ interest was protected through Essentia’s requirement that she maintain separate coverage for her regular vehicle.
However, a panel of the Colorado Court of Appeals disagreed. In DeHerrera v. Sentry Insurance Company, the Colorado Supreme Court concluded that the state’s uninsured motorist insurance statute mandates coverage regardless of which vehicle is occupied at the time of injury because it provides coverage for people, not vehicles.
The panel concluded that Essentia’s regular use vehicle exclusion “is squarely contrary to DeHerrera’s central holding” and reversed the trial court’s grant of summary judgment in favor of the insurer.
In late November 2017, Paul and Brenda Frederiksen entered a contract with Gravina Siding and Windows to replace their home’s cedar siding, which had been damaged by woodpeckers, with steel siding. The Frekeriksens agreed to pay Gravina more than $42,000 and put down $10,000 toward the price.
The Frederiksens wanted the siding replaced before the woodpeckers returned in the spring. Gravina told them it could start work within 10 to 14 weeks of signing the contract and estimated the job would take up to four weeks to complete. Gravina’s subcontractors started working in late March 2018 and were still not finished in August, when the Frederiksens received a bill from Gravina requesting payment for the outstanding balance on the contract.
The Frederiksens believed Gravina had repeatedly breached their agreement, so they terminated the contract and denied the company and its subcontractors access to their property.
Gravina sued the Frederiksens for breach of contract, breach of covenant of good faith and fair dealing and unjust enrichment. The Frederiksens filed counterclaims against Gravina and third-party claims against Larry Gravina, the company’s owner, and two Gravina employees. The trial court dismissed all of the Frederiksens’ claims except their breach of contract claim against Gravina and their negligent supervision claim against the third-party defendants.
Following a bench trial, the court found Gravina had materially breached the contract and the Frederiksens had properly terminated it. However, the court ultimately awarded Gravina a net judgment of $19,000 for its unjust enrichment claim and rejected the Frederiksens’ negligent supervision claim and request for attorney fees.
Gravina cross-appealed the trial court’s finding that it breached the contract, allowing the Frederiksens to terminate the contract and recover damages. A panel of the Court of Appeals upheld the lower court’s decision, finding that by failing to complete the project in a timely and satisfactory manner, Gravina breached material terms of the contract and the Frederiksens were entitled to end the agreement and recover actual damages.
On appeal, the Frederiksens challenged the trial court’s ruling that they had been unjustly enriched, its decision to deny them damages for Gravina’s breach of contract, the rejection of their negligent supervision claim, the exclusion of certain expert testimony and the court’s denial of their request for attorney fees.
The Court of Appeals rejected the Frederiksens’ arguments about unjust enrichment, their negligent supervision claim, the exclusion of expert testimony and denial of attorney fees. However, the panel determined a remand is necessary to sort out whether the amount the Frederiksens were ordered to pay Gravina is correct. According to the panel, the trial court didn’t explain how it determined an award of $19,000 to the company was appropriate.
“It never identified how much damages Gravina’s breach caused or, for that matter, how much the Frederiksens benefitted as a result of Gravina’s efforts,” the panel said in its opinion, adding that because it couldn’t ascertain how the lower court arrived at the $19,000 figure, a reversal and remand for further findings are necessary.